Deal sourcing attribution

Deal sourcing attribution can vary significantly depending on the fund's structure, culture, and processes. Based on the most helpful WSO content, here are some insights into how deal sourcing attribution is typically determined:

1. Proprietary vs. Auction Deals:

   • Proprietary deals (off-market or bilateral) are often the gold standard for sourcing attribution. These are deals where the individual or team directly cultivated the opportunity, often through relationships, cold outreach, or unique insights.
   • Limited auction deals can also count, especially if the individual brought a differentiated angle or insight that made the fund a standout bidder.

2. Level of Involvement:

   • Attribution often depends on how much work the individual did to bring the deal to the table. For example, if someone identified the opportunity through a screen, conducted initial diligence, and pitched it internally, they are more likely to receive credit.
   • Conversely, if the deal came through a banker or another intermediary, attribution might be shared or less emphasized unless the individual added significant value.

3. Internal Processes:

   • Some funds have formal tracking systems where every deal is logged, and the originator is noted. This helps in determining attribution during performance reviews or bonus discussions.
   • Others rely on informal recognition, where senior team members acknowledge contributions during deal team meetings or post-deal reviews.

4. Stories from WSO Threads:

   • A recurring theme is the importance of proprietary deal flow. Many funds reward individuals who can source off-market deals, as these are less competitive and often more lucrative.
   • One user shared that their fund attributed deals based on the "first touch" rule—whoever initiated contact with the target company or intermediary got credit, even if others later contributed to the process.
   • Another story highlighted the value of being a "differentiated party" in an auction. For example, one associate received credit for a deal because they had built a relationship with the target's management team months before the process began, giving their fund an edge.

Key Takeaways:

• Proprietary and bilateral deals are highly valued for attribution.
• Significant involvement in screening, diligence, or relationship-building can earn credit, even in auction processes.
• Funds often have unique attribution systems, so understanding your firm's criteria is crucial.

If you're looking to stand out, focus on building relationships, identifying unique opportunities, and adding value early in the process.

Sources: HF to PE post-MBA - my story and seeking advice (long-time poster)!, Why the hate towards growth PE / sourcing (e.g. KKR Tech)?, Learning Curve as 2nd Year Analyst, Corp Dev / Strategy Role - No Deal Flow?, The rise of business development roles in the industry